On October 12, 2006, Wesley Snipes, Eddie Ray Kahn, and Douglas P. Rosile were charged with one count of conspiring to defraud the United States und.er 18 U.S.C. § 371 and one count of knowingly making or aiding and abetting the making of a false and fraudulent claim for payment against the United States . . .
Snipes was also charged with six counts of wilfully failing to file Federal income tax returns by their filing dates . . . The conspiracy charge against Snipes included allegations that he filed a false amended return including a false tax refund claim of over US$4 million for the year 1996 and a false amended return including a false tax refund claim of over US$7.3 million for the year 1997.
The government alleged that Snipes attempted to obtain fraudulent tax refunds using a tax protester theory called the "861 argument" (essentially, an argument that the domestic income of U.S. citizens and residents is not taxable) . . . Snipes used accountants who already had a history of filing false returns to obtain refund payments for their clients.
Snipes was a client with American Rights Litigators, which Kahn operated. As a client . . . The government also charged that Snipes failed to file tax returns for the years 1999 through 2004.
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In a December 4, 2006 letter from Snipes in response to his indictment, he declared himself "a non-resident alien" of the United States . . .Snipes is (actually) a US born citizen.
On February 1, 2008, Snipes was acquitted on the felony count of conspiracy to defraud the government and on the felony count of filing a false claim with the government.
He was, however, found guilty on three misdemeanour counts of failing to file Federal income tax returns . . .
His co-defendants, Douglas P. Rosile and Eddie Ray Kahn, were convicted on the conspiracy and false claim charges in connection with the income tax refund claims filed for Snipes.
